The government had announced procurement of 20,000 tonnes of rubber by STC from the open market in May 1998 and this would continue this financial year till the target was achieved, he told PTI on the sidelines of a meeting of the Association of Natural Rubber Producing Countries (ANRPC) here.

In May 1998, the government asked STC to procure rubber at Rs 34 a kg from nominated agencies and announced that the procured rubber would either be exported or sold against surrender of advance (import) license by rubber manufacturing units, especially tyre makers.

The procurement, however, picked up only towards 1998-end after natural rubber prices in the country hit a seven-year low. Then, the government ordered the STC to procure rubber from the open market insteadof nominated agencies and also fixed a weekly procurement target of 1,000 tonnes.

Prabhu said prices of natural rubber in the domestic market had shown signs of recovery during the last few weeks and it had to cross the psychological barrier of Rs 30 per kg to sustain the upward movement.

"Once it crosses Rs 30 a kg, then it is bound to rise further," he said.

Prices for RSS four grade closed at Rs 28.25 a kg at the primary producing centre of Kottayam yesterday.

Earlier, inaugurating the ANPRC coordinating committee meeting on production and marketing strategies, Prabhu said government was not shy of making market interventions and had taken measures to alleviate hardship of growers.

"Thanks to the policies followed by the government, the Indian grower can at least fetch 20-30 per cent more prices compared to his counterparts elsewhere," he said.

While taking steps to tackle the excess supply situation in the market, the Rubber Board had given priority to measures to improve productivity levelfurther, reduce production costs and diversify growers' income through exploitation of rubber honey, rubber seed and rubber wood, he said.

Prabhu said over the last 20 years, natural rubber prices had increased only 0.17 per cent in nominal terms and now producing countries were debating over sharp fall of 70 per cent in prices after record peak prices in 1995.

With prospects of recovery in prices dim, a perception was evolving that recovery from on-going crisis was likely only with sustained economic growth in the South-East Asian region and industrialised nations of Europe, the US and Japan, he said.

Barring China and India, most of the rubber-producing nations depended on exports and as 92 per cent of these exports were utilised by tyre makers, prices were controlled by a handful of global multinational companies, he added.